CBO: Debt-limit deadline likely in first half of March

CBO: Debt-limit deadline likely in first half of March
© Getty Images

The Congressional Budget Office (CBO) on Wednesday said the Treasury Department will most likely run out of cash in the first half of March if Congress doesn't raise or suspend the debt limit before then.

The nonpartisan budget scorekeeper had estimated in November that the debt-limit deadline would be in late March or early April. But the CBO moved up its projected deadline as a result of the tax-cut law President TrumpDonald John TrumpPentagon update to missile defense doctrine will explore space-base technologies, lasers to counter threats Giuliani: 'I never said there was no collusion' between the Trump campaign and Russia Former congressmen, RNC members appointed to Trump administration roles MORE signed in December.

"Because the tax legislation reduced individual income taxes for most taxpayers, the Internal Revenue Service released new income tax withholding tables for employers to use beginning no later than the middle of February 2018," CBO said in a report. "As a result of those changes, CBO now estimates that, starting in February, withheld amounts of individual income taxes will be roughly $10 billion to $15 billion per month less than anticipated before the new law was enacted."

Congress had suspended the debt limit though Dec. 8, but the ceiling was reinstated after that. Since the debt limit has been reinstated, the Treasury Department has been using "extraordinary measures" that allow it to continue to borrow funds for a short period of time. 

The CBO is predicting that the extraordinary measures will be exhausted in the first half of March, though it could happen at an earlier or later date. If the Treasury Department runs out of cash, the government would delay payments, default on its debt or both, the CBO said.

Treasury Secretary Steven MnuchinSteven Terner MnuchinIRS waiving penalty for some in first filing season under Trump's tax law Senate rejects effort to block Trump on Russia sanctions MIT removed Russian oligarch from board following sanctions from Treasury Department MORE urged lawmakers Tuesday to raise the debt ceiling as soon as possible. But votes on the debt limit have been tough for Republicans in the past, because they have sought to pair increases in the limit with cuts in spending.

House Minority Leader Nancy PelosiNancy Patricia D'Alesandro PelosiOvernight Health Care: Dem chair plans hearing on Medicare for all | Senate GOP talks drug prices with Trump health chief | PhRMA CEO hopeful Trump reverses course on controversial pricing proposal Centrist efforts to convince Trump to end shutdown falter On The Money: Shutdown Day 26 | Pelosi calls on Trump to delay State of the Union | Cites 'security concerns' | DHS chief says they can handle security | Waters lays out agenda | Senate rejects effort to block Trump on Russia sanctions MORE (D-Calif.) blasted the tax law following CBO's report.

“Already, the dire effects of the GOP Tax Scam’s giveaways are being exposed," she said in a statement. "Far from paying for itself, as Republicans promised, the GOP’s fevered push to pad the pockets of corporations and the wealthiest one percent is exploding the deficit." 

Updated: 5:01 p.m.